NCPA - National Center for Policy Analysis

Texans Created Over A Thousand Local Businesses after Texas Eased Restrictions on Selling Food Made at Home

September 25, 2014

Texas is enjoying a burst of entrepreneurship after enacting laws that let anyone turn a home kitchen into a business incubator. Under "cottage food" laws, people can sell food baked or cooked at home, like cookies, cakes and jams, if it's deemed to have a very low chance of causing foodborne illnesses. Crucially, cottage food laws exempt home bakers from having to rent commercial kitchen space.

Texas passed it first cottage food law in 2011. It does not extend to "potentially hazardous" foods, like dishes that have meat or shellfish, so consumers have had few problems with home bakers. After contacting both the Texas Department of State Health Services (DSHS) and environmental health departments for the 25 largest cities and counties in Texas, the Institute for Justice found no complaints regarding foodborne illnesses from a cottage food business.

Under the first cottage food law (SB 81) passed back in 2011, Texans were limited to selling only baked goods, jams, jellies and dried herbs. But the state's second cottage food law (HB 970), enacted September 1, 2013, redefined "cottage food" to make it more encompassing. Now Texans can legally create and sell candy, coated and uncoated nuts, fruit butters, cereal, dried fruits and vegetables, vinegar, pickles, mustard, roasted coffee and popcorn out of their homes. Moreover, HB 970 allows modern-day homesteaders to sell their treats at more locations, including at farmers' markets, roadside stands and events like county fairs. Previously, the law only permitted selling out of the home directly to consumers.  Furthermore, state law explicitly bans cities and counties from using zoning to stop cottage food businesses.

Unfortunately, cottage food laws in other states needlessly restrict entrepreneurs.

  • In Minnesota, home bakers can only earn up to $5,000 a year, one of the lowest caps in the nation. That comes out to less than $100 a week.
  • Selling too many cookies or cakes, or selling at a venue that isn't a farmer's market or community event could mean up to 90 days in jail or fines of up to $7,500.

Arguing these regulations "restrict or defeat the earn an honest living," Jane Astramecki and Mara Heck, two home bakers, filed a lawsuit with the Institute for Justice to challenge the Minnesota cottage food law.  In June, a Minnesota judge dismissed the case, and IJ is now appealing that decision.

Source:  Nick Sibilla, "Texans Created Over A Thousand Local Businesses After Texas Eased Restrictions On Selling Food Made At Home," FORBES/INSTITUTE FOR JUSTICE


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